If you’re from the western USA, you’ll recognize “Les Schwab Tire”.  The company became the dominant player in their market, earning profit margins three times higher than their competitors.  From humble beginnings in 1952, Les Schwab, knowing almost nothing about the tire business, sold his home and life insurance policy to buy a failing tire shop in Prineville, Oregon. (It didn’t even have running water!)  In the first year of operation sales shot up fivefold.  By 1955 Les Schwab had expanded to four more stores and by 1966 the store count rose to 35.  Today, there are over 400 Les Schwab Tire Centers, employing 7,000+ people across the western USA.

How did Les Schwab make tires — a basic, boring product — so profitable? He didn’t try to make a better product; he made a better business.   Here is what he did to differentiate his business:

• Memorable Customer Service: Employees literally run out of the store to greet customers in the parking lot with a smile and handshake. This immediate engagement creates a welcoming, unforgettable experience.
• The Tire Superstore Concept: Unlike most tire stores which simply displayed a few sample tires on a rack, Les Schwab turned buying tires into a shopping experience, giving customers real choices and involvement.
• Free Perks for All: No matter where you bought your tires, Les Schwab offered free flat fixing—building goodwill even with non-customers.
• Relentless Value: Schwab didn’t stick to just one tire brand. Instead, he partnered with whichever brand gave his customers the most value, helping to keep prices down.
• More Savings: The company ran its own re-treading facility, letting price-conscious shoppers get back on the road for less.
• Store as the Brand: Rather than promote Goodyear or Pirelli, Les Schwab promoted Les Schwab Tires. The brand is the store; the tires are just the product.
• Profit Sharing: Les Schwab shared half of store profits with his store managers, treating them as true partners. This motivated entrepreneurial leaders to deliver their best.

What can we learn from Les Schwab?

1. Always create value: A real strategy is a focused effort to address customer needs in ways that matter.
2. Value is more than price: Les Schwab’s prices were competitive but what set them apart was the unique experience—like being greeted at your car or shopping for tires as you might shop for shoes.
3. Strategy doesn’t need to be complicated: Sometimes competitive advantage comes from simple ideas.   Les Schwab sells nothing proprietary or unique.  They just make their service stand out from the rest.
4. Employee engagement is key to good execution: Schwab shared profits with store managers creating a shared set of goals while allowing each manager autonomy in running the business.  The more store managers earned – the more Schwab earned.

Great business strategy isn’t just about what you offer but about how you offer it. In a world where many products and services are indistinguishable, Les Schwab shows that the real edge comes from designing remarkable experiences and solving the right problems for your customers. Do that —consistently and passionately—and your business can thrive, even in the toughest markets.  How is your business strategy shaping up?

1.   https://www.oregonencyclopedia.org/articles/les_schwab_1917_2007_/
   2.    Story suggested by George Ericsson who referenced a newsletter “Brainfood”